The ongoing crisis hitting international finance markets has left its traces at Dresdner Bank in the first half of 2008. While the operating profit in the corporate sector Private & Corporate Clients amounted to 339 million euros in the first half of the fiscal year, the figure for Investment Banking showed minus 1292 million euros. This is primarily a consequence of value adjustments of almost 1.4 billion euros, for instance, in the ABS account book and for Monoliner Exposure.

The operating profit of Dresdner Bank subsequently fell from 1097 million euros in the same period of the previous year to a figure of minus 964 million euros in the first half of 2008. Total operating expenses fell considerably by 12.8 percent to 2303 million euros.

"The difficulties in the global capital market environment also had a negative influence on Dresdner Bank’s results", reports Herbert Walter, Chairman of the Board of Managing Directors of Dresdner Bank. "In the private and medium-sized business segment, many of our customers are playing it safe. In the investment banking sector, we have continued our policy of reducing critical assets." Herbert Walter adds: "We maintain a strong operational discipline in both our credit policies and in terms of cost control. In addition to this, Dresdner Bank also maintains a stable balance and liquidity situation."

The total operating income of Dresdner Bank amounted to 1415 million euros, following 3793 million euros in the same period of the previous year. This detrimental effect was predominantly due to the net trading income. Due to value adjustments in the first half of 2008, these fell from 640 million euros in the previous year’s period to a figure of minus 1146 million euros.

Further, the current defensive attitude of customers with regard to securities transactions led to a drop in net fee and commission income of almost 23 percent to 1162 million euros. Net interest and current income remained at the previous year’s one-time-effect adjusted high level of 1399 million euros.

In the Private & Corporate Clients segment, the total operating income was influenced by the cautious attitude of investors in the first six months of the year. The results fell by eight percent, to 1716 million euros. The Private & Corporate Clients segment continued to show an appreciable yield with a return on risk-adjusted capital (RoRAC) after tax of 25.2 percent.

Another increase in the Private & Corporate Clients segment was seen in customer volume: this figure rose in mid-2008 to 6.52 million – 300,000 above the previous year’s level. A positive development in new business was also registered in consumer loans and mortgage lending: in the first half of 2008, this rose, in comparison with the previous year’s figures, by 21 percent, to 2147 million euros. In a half-year comparison of the deposits sector, Dresdner Bank recorded an increase in customer deposits of 13 percent, to 68 billion euros.

At the same time, the growth initiatives launched in the second quarter got off to a successful start.

The new product line, dresdner bank direct24 registered approximately 230,000 users in the first weeks after its launch, one third of whom were new customers. The considerable influx of new customer assets is a cause for particular satisfaction: With "direct 24", Dresdner Bank has successfully secured around one billion euros of customer assets which would otherwise have been deposited with competitors.

The campaign for small and medium sized enterprises (SME, "Mittelstand") is also showing positive effects: for instance, new Dresdner Bank products made an additional credit volume of 700 million euros available to SMEs in Germany. Further growth in this customer segment has also been registered. Earnings from Corporate Banking rose by six percent in the second quarter.

At Dresdner Kleinwort, the development of earnings in the first half of 2008 was influenced by the capital markets crisis. Total operating income from investment banking amounted to minus 254 million euros. The Credit Derivatives Division within Capital Markets was particularly hard hit by the crisis on the financial markets: income showed a figure of minus 846 million euros as a consequence of value adjustments.

In comparison, the Global Banking Division achieved an income of 643 million euros. Total assets and risk-weighted assets in investment banking were reduced and margins rose. The operational cost base of the corporate division fell considerably – credit risks range at a low level.

As already seen in the first quarter, Dresdner Bank again reveals an ongoing operational discipline throughout the second quarter. The decrease in total operating expenses of almost 13 percent is not only a consequence of lower service-dependent commissions, when compared with the same period of the previous year, but is also due to the reduction of the cost base. On the whole, total staff costs fell by 324 million euros to 1369 million euros. At the same time, non-staff operating costs decreased by 48 million euros to 897 million euros.In the case of loan impairment allowances, Dresdner Bank registered a moderate net increase of 76 million euros in the first half of 2008. This reflects the consistently excellent quality of the loan portfolio.As of June 30, 2008, Dresdner Bank has reduced its total assets to 480 billion euros. The core capital ratio according to Basel II lies above the targeted bandwidth with a figure of 9.3 percent.

The figures given in this press release relate to the Dresdner Bank subgroup and have been prepared in accordance with the IFRSs. The classification of the figures is comparable with those for other major German banks that apply IFRSs. The figures for the Dresdner Bank subgroup prepared in accordance with the IFRSs are not identical to those published by Allianz for its Banking Segment, which includes all of Allianz's banking activities.

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